The NY Times is reporting new estimates from the Treasury Department about the extent of the government’s exposure from the TARP programs. Some of the highlights:

  • Treasury Department loans under the TARP program now total $370 billion.
  • Of that amount, a net $328 billion is projected to be recovered. That includes profits on TARP investments. The losses are centered on the TARP bailouts to GM, Chrysler and AIG. Bailouts to banks are expected to be net positive (more gains than losses).
  • The improved picture lowers the estimated deficit for the fiscal year by $200 billion.
  • Most of the exposure comes from the TARP I program from October 2008. Of the additional $500 billion in authority granted in February (TARP II), only $7 billion has had to be expended.

Of course, the article points out that there are other huge government exposures related to rescuing the financial markets, including a trillion dollars of mortgage-backed securities purchased by the Federal Reserve. But looking at just the TARP piece of the government intervention, is it just me, or does this emerging picture demonstrate a vastly more successful TARP program than we first imagined? I wonder if Geithner’s critics are going to be willing to reevaluate his performance.

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